The European Investment Bank (EIB) is lending EUR 25 million to CIBANK Bulgaria, part of the KBC Group, to finance the projects of small and medium-sized enterprises (SMEs) and municipalities in Bulgaria.
This new loan provided by the EIB is the first operation with CIBANK and represents further extension of the EIB's network of partner banks in Bulgaria. This loan will support Bulgarian SMEs by improving their access to long-term finance. It is also part of an expansion of the EIB's support for SMEs at EU level in response to the current crisis. In order to accelerate this, it also includes the simplification of the reporting of intermediated loans and the broadening of their scope by providing higher funding possibilities and also covering the intangible aspects of investments. In addition, mechanisms are being introduced to ensure the transfer of the advantage of EIB funds to the final beneficiary.
EIB funds will finance small and medium-sized projects in Bulgaria in the areas of industry, services, tourism, energy, energy saving, infrastructure - including health, education and urban renewal - environmental protection and the knowledge economy.
Under this intermediated loan CIBANK will benefit from the SME Finance Facility, a special scheme combining EIB loans with European Commission grants. Aimed at further developing strong and competitive small and medium-sized enterprises, the SME Finance Facility will provide CIBANK with additional incentives to lend to SMEs. This will further contribute to the increase in long-term financing for small-scale investments in Bulgaria - an important element of supporting the country's economic growth and competitiveness.
Under the same loan Bulgarian municipalities will also benefit from EIB support - CIBANK will participate in the Municipal Finance Facility. This scheme supports small municipal infrastructure and combines EIB loans with EC grants to both Bulgarian municipalities and financial intermediaries (in total up to 12.5% of the EIB loan amount).
The task of the EIB, the European Union's financing institution, is to contribute to the integration, balanced development and economic and social cohesion of the Member States by financing sound investment. Since 1990, the EIB's financing in Bulgaria has totalled more than EUR 2.6 billion. Approximately 14% of this amount (EUR 365 million, including the current loan) represents loans supporting the development of the entrepreneurial activities of SMEs and municipalities in the country.